Day trading online is fast becoming one of most popular ways to make a living from your own home. You have to be careful however as there are far more losers in trading than there are winners. Have the right strategy, money management and indicators then soon you will find yourself leaning towards the winners. However there are many people who don’t treat the market with the respect it deserves and merely “gamble” on possible outcome which limits their ability to make money.
Professional traders and traders who make a full-time living online from the market understand that in order to be consistently successful you need to have the right set up and the right mind-set. Traders spend years perfecting their trading strategies, reading and computing data on all aspects of day trading, and one of the areas which they spend most time looking at is how to read charts and how to use indicators.
There are no “magic” set of indicators
When rookie traders are learning about charts and indicators, it can be tempting to try to implement a complex set in the hope that due to their complexity they offer more than other indicators. In reality this couldn’t be further from the truth and many top traders continue to use very simple set ups in order to generate wealth.
It’s not a bad thing that there isn’t an easy way to make money day trading online, as the world of trading is extremely addictive and once you’ve started making your first profits you’ll be hooked for life! Part of the journey to becoming successful is to understand how to analyze the data on charts in order to make the right decisions that make you money. Learning how to read charts and developing a robust strategy will go a long way in improving your skills as a trader, but understanding how to leverage the right indicators will give you that extra edge.
Don’t get bogged down with all the thousands of different indicators, choose a simple set, combine them with your strategy and practice on a demo account. Once you’ve developed a system which allows you to make a decent return on your trades then you know you can move over to a live account and hopefully achieve the same results.
What risk are you prepared to take?
Understand the principles of money management and develop a day trading system which has a level of risk which you are prepared to take and then use the most appropriate indicator for that strategy. Some chart indicators do work better than others however and should be looked on preferably for your trading strategy. Often the best trading indicators are the ones that are easiest to use. Most traders will tell you that the best strategies for day trading are simple strategies and the same is true with indicators. There’s no point over complicating an already technical marketplace, and complex indicators will often leave you confused as to what you should do. You will be overwhelmed with all the different signals they are giving out, and more often than not you won’t be able to react fast enough, making your trades higher risk.
The right set of indicators will depend on the level of risk you are prepared to take, however there are some indicators which make trading as simple as possible so you can focus on making the right call. These indicators will give you the information you need without over complicating your charts, helping you to make the best decisions. Don’t be grouped in with the 95% of failures, be in the 5% of winners and find out what the best indicators are for your day trading.